Nest/ Personal Account Advice

In 2012 the government were going to introduce Personal Accounts and every employer will be compelled to contribute 3% of payroll to every employee's pension. The only exceptions will be if the employee individually chooses to opt out of the employer's Nest/ Personal Account or if the employer has already provided something better...

Full implemenetion has been pushed back to 2017.

The recession has exhausted the public purse and there is already talk of a state pension age of 70. The challenge for employers is to plan now for the introduction of nest/ personal accounts. Given the state of government finances the biggest single issue for business is to educate staff to understand the critical importance of putting money aside to fund lifestyle after employees stop work. Our experience, with clients such as SeaFrance, clearly demonstrates that employees require personal, independent financial advice. Facts & Figures has been advising employers on providing for their staff for 15 years. Our aim is to foster proper understanding of the issues through clear communication at all stages of the process.

Nest/ Personal Accounts will be introduced in April 2012 as a "new way to save". They will effectively be personal pensions, run on a occupational basis and administered by employers. All employees will be automatically enrolled into a personal account as long as they are aged between 22 and the state pension age; they earn more than the Primary Threshold (£5,225 per annum in 2007/8); their employer does not already offer a pension scheme with benefits equal to or greater than a personal account.
There are likely to be several investment funds to choose from (including environmental and ethical options), as well as a default fund for those not wanting to make a choice.
Once an individual has begun a personal account, it will stay with them throughout their career, regardless of when they change employers. The aim will be to accrue a fund which will provide an income in retirement. As with traditional money purchase pensions the policyholder will not be able to access the funds before age 55 when there will also be an option to take 25% of the fund as tax free cash. The Government is naturally keen to maximise the benefits to members, and therefore wants charges to be kept to a minimum – ideally below 0.3%. As far the contributions are concerned, the Government intends for employees to pay 4% of their earnings, employers 3%, while at the same time contributing an extra 1% itself via basic rate tax relief.
This 8% minimum contribution will be phased in over a three year period (for example in 2012, employers will only have to pay in 1%).

Independent financial advice for employers and business on nest/ personal accounts throught Kent (Maidstone, Ashford, Wye, Canterbury) the South East & nationally. Contact Us for further information.